Problem 3

Problem 3 (10 points): Compute the following implied forward rates (IFRs) based on the yield curve provided (assume semi-annual compounding): \begin{tabular}{l|r|c|c|c} \hline & & MATURITY (YEARS): & YIELD (APR): \\ \hline IFR (0,1): & 4.30000% & (x.xxxxx\%) & 1 & 4.30000% \\ \hline IFR (1,1): & 4.32000% & 2 & 4.31000% \\ \hline IFR (2,1): & 8.75374% & 3 & 4.32000% \\ \hline IFR (3,1): & 4.34000% & 4 & 4.33000% \\ \hline IFR (4,1): & 4.35000% & 5 & 4.34000% \\ \hline IFR (5,1): & 4.35999% \\ \hline IFR (6,1): & 4.36999% \\ \hline IFR (7,1): & 4.37999% & 6 & 4.34999% \\ \hline IFR (8,1): & 4.38999% & 7 & 4.35999% \\ \hline IFR (9,1): & 4.39998% & 8 & 4.36999% \\ \hline \end{tabular}